South Korean Food Giant Aims To Take A Bite Of The $2 Trillion Global Halal Food Market

South Korean food giant SPC Group plans to expand into Malaysia to take a bite of the $2 trillion global halal food market.

SPC Group said it plans to invest 40 billion won (about $30 million) to build a halal-certified factory in Johor, a Malaysian state bordering Singapore. South Korean media reported that the location, with a seaport, will give the factory a channel to ship goods throughout Southeast Asia and into the Middle East.

The deal is led by Hur Jin-soo, the eldest son of SPC Group chairman Hur Young-in, known as South Korea’s “Franchise King.” Jin-soo was named president of Paris Croissant, a subsidiary of SPC Group that runs the flagship Paris Baguette bakery café franchise brand, in December.

SPC Group also runs 1,800 Dunkin’ Donuts outlets and Baskin Robbins ice cream parlors, as well as Pascucci (Italian café), The World Vine (wine), Jamba Juice (smoothies) and New York burger house Shake Shack in Korea.

The Johor factory will make 100 types of bread, cakes and sauces—all prepared in accordance with Islamic law. The factory is scheduled to be completed in June next year. SPC Group has also established a 50-50 joint venture with Malaysia’s Berjaya Food, which operates Starbucks coffee shops and 7-Eleven convenience stores in Malaysia.

“Halal hub has been an important strategy in the Malaysian food sector,” says Alizan Mahadi, a senior director of research for Kuala Lumpur-based think tank Institute of Strategic & International Studies Malaysia. “Malaysia has some of the best standards for halal certification and therefore it’s [recognized] within the Muslim world.”

Officials in Kuala Lumpur have worked toward standardizing halal food since 1974, when a prime minister’s office research arm started to issue halal certification letters. The Southeast Asian country released its first halal standards in 2000, ahead of other Muslim nations. The standards elevated a “cottage industry” to a “vibrant new economy” with an estimated $2.3 trillion market value, the Malaysian government’s Islamic Tourism Centre says.